Managing Venture Capital in times of Uncertainty - Fund managers perspective

Abstract: This study aims to investigate the fundraising and investment process of Venture Capital funds and how the managers act during times of increased rates and times of uncertainties. Due to the uncertain times of high inflation and increasing interest rates, pressure has been put on financial markets. Previous research has shown how the demand and supply of Venture Capital services relate to the change in interest rates through quantitative methods. This study takes a qualitative approach to find out how and why managers act the way they do. The findings show that Venture Capital fund managers do not seem as sensitive to increased interest rates as previous research has shown. Venture Capital managers, in general, seem to act slightly differently due to these recent changes in the macroeconomic landscape. These findings are contradictory to the previous research that this study was based on. The study finds that perhaps it is the change in interest rates and the business cycles that are of concern for Venture Capital managers rather than the level of interest rate.